Story highlights

The FDA finds "serious violations" at five of the company's production facilities

The egg industry has been a frequent target of animal rights groups

McDonald's and Target dropped an egg supplier this week after an activist group released disturbing video showing what it says shows animal cruelty at three of the company's barns.

The undercover video, released by Mercy for Animals, was allegedly shot between May and August at facilities run by Sparboe Farms in Colorado, Iowa and Minnesota. It shows hens crammed in crowded cages, workers burning beaks and one, trying to shove a bird inside the pocket of a co-worker, apparently for fun. Another worker presses his thumb against the back of a chick's neck until it breaks.

"Regarding the undercover videos, the behavior on tape is disturbing and completely unacceptable. McDonald's wants to assure our customers that we demand humane treatment of animals by our suppliers. We take this responsibility -- along with our customers' trust -- very seriously. It's important to note that the most alarming actions on video did not occur at Sparboe's Vincent, Iowa, facility that supplies McDonald's. Nonetheless, our extremely high standards for our suppliers prohibit this conduct," McDonald's said in a statement, announcing its decision to cut ties with Sparboe Farms.

Target similarly said it was dropping Sparboe Farms, which describes itself as the fifth-largest shell egg producer and marketer in the United States.

The Minnesota-based egg supplier said it first heard about the abuse allegations from ABC News, which conducted an investigation of the company.

Sparboe Farms launched an internal investigation upon learning about the undercover video, which was shot by an animal activist hired under false pretenses, according to Beth Sparboe Schnell, president and owner of Sparboe Farms. Four employees have been fired and management changes have taken place as a result of that investigation, which is ongoing, she said. An independent auditor from Iowa State University was also hired to conduct a third-party animal welfare audit.

"I was deeply saddened to see the story because this isn't who Sparboe Farms is. Acts depicted in the footage are totally unacceptable and completely at odds with our values as egg farmers. In fact, they are in direct violation of our animal care code of conduct, which all of our employees read, sign and follow each day," Sparboe Schnell said in a statement.

The release of the video and the company's response come in the wake of a warning letter sent to Sparboe Farms from the U.S. Food and Drug Administration earlier this week.

The agency said it found "serious violations" after visiting five of the companies' production facilities, including failure to have and implement a written Salmonella Enteritidis prevention plan and failure to prevent stray poultry, wild birds, cats and other animals from entering poultry houses. The company said it responded to the FDA, which in turn told Sparboe Farms that some of the corrective actions it took were insufficient. Further steps were then taken to remedy the situation, the company said.

The egg industry has been a frequent target of animal rights groups, which accuse suppliers of keeping hens in unusually cruel conditions, and have sometimes used undercover videos to prove their point.

In 2004, People for the Ethical Treatment of Animals (PETA) released video showing slaughterhouse workers for a KFC supplier stepping on birds, kicking them and slamming them against walls and floors.

According to PETA, it is common practice for workers to cut a hen's beak with a hot blade at just a few days old, with no painkillers. Those that survive are then kept in small wire cages, or battery cages, that are so small as to prevent them from lifting their wings, it says.

The Humane Society of the United States advocates for so-called cage-free systems, which allow hens to walk around, spread their wings and lay their eggs in nests. However, the simple absence of battery cages is not enough to ensure a facility is "cruelty-free," the rights group says.

The egg industry has also been buffeted recently by food safety concerns. Regulators recalled about 550 million eggs from the U.S. market in the wake of a salmonella outbreak traced to two Iowa farms in August.

About 1,300 cases of salmonella was linked to eggs from Wright County Eggs and Hillandale Farms of Iowa, forcing a recall of their products in at least 17 states, the FDA and the Centers for Disease Control reported. Wright County Egg recalled 380 million eggs, while Hillandale Farms recalled 170 million eggs.